The economic downturn has not only emptied bank accounts and turned neighborhoods into ghost towns, it has derailed many of the demographic trends that businesses had been counting on for customers. Which trends will get back on track and which will be permanently detoured? Here’s what you can expect.

1. Births: Bye-Bye Boomlet. After rising robustly during the past few years, the annual number of births fell by 1.6 percent to 4,247,000 in 2008. A decline of this magnitude has occurred only once (in 1993) since the birth years of the baby-bust generation (Generation X) in the 1970s. What it means: The decline could be a blip as it was in 1993 or the start of another baby-bust generation.

2. Mobility: Pent-Up Demand. With the housing market in paralysis, the geographic mobility rate is at a historic low. Only 11.9 percent of Americans moved from one house to another between 2007 and 2008. The 4.7 million people who moved from state to state was the fewest since 1949-50, despite a more than doubling of the U.S. population. What it means: Expect to see a leap in the number of movers and the mobility rate when the housing market thaws.

3. Homeownership: Below the Peak. After reaching a record high of 69 percent in 2004, the homeownership rate fell to 67 percent in 2009 as foreclosures turned owners into renters. Because homeownership rises with age and peaks (at 83 percent) in the 65-to-74 age group, the rate should be rising–not falling–as boomers age. What it means: The aging of the population will prevent the homeownership rate from dropping much more.

4. Living Arrangements: Crowded Nest. The number of people who live alone fell by 510,000 between 2008 and 2009, the first decline since 1993. Behind the decline is the return of many young adults–unable to find jobs–to their parents’ home. According to the Pew Research Center, 19 percent of 45-to-54-year-olds with grown children have had an adult child move back home in the past year. What it means: More stress on the middle-aged backbone of the economy.

5. College: Enrollment Declines. You might have heard that college enrollment is at an all-time high despite the Great Recession–but not at traditional four-year schools. Those numbers peaked in 2005. Among full-time students at private four-year schools, enrollment in 2008 was 10 percent below the 2005 peak. In contrast, enrollment at two-year schools climbed 24 percent during those years. What it means: Trouble for private colleges.

6. Retirement: Getting Later. Labor force participation rates are rising in for older Americans. Among men aged 62 to 64, the participation rate is projected to climb from 53 percent in 2008 to 59 percent by 2018, according to the Bureau of Labor Statistics. This compares with a rate of just 45 percent for their fathers (men aged 62 to 64 in 1988). What it means: The retirement market will be far smaller and less lucrative than what had been anticipated.

7. Health: Only Fair or Poor. Studies show that boomers are entering their sixties in poorer health than their parents were at the same age, despite lower rates of smoking and higher levels of education (for more on this, see Q & A below). Over the past decade, the physical and mental health of the middle-aged population has declined as boomers filled the age groups. Now on the brink of old age, boomers may bring a halt to the improving health of people aged 65 and older. What it means: Higher health care costs.

8. Incomes: Reality Bites. Among men who work full-time, median income peaked long ago, in 1973. Household incomes grew for decades, however, because women went to work. Now the game is up. The incomes of women who work full-time stagnated between 2000 and 2008 and household incomes fell 4 percent, after adjusting for inflation. Men and women aged 45 to 54 have seen their incomes fall steeply (men down 11 percent, women down 5 percent). What it means: With the nation’s peak earners staggered by the economic downturn, the American standard of living has taken a hit.

9. Spending: Back to Basics. Perhaps nothing symbolizes excessive spending as much as the Consumer Expenditure Survey category “decorative items for the home.” This category includes the many whimsical–and entirely unnecessary–bric-a-brac of home decor. Between 2000 and 2007, average household spending on decorative items fell 27 percent, after adjusting for inflation. What it means: Americans will be spending more on necessities and less on luxuries, and businesses will have to adapt.

10. Wealth: Regaining Lost Ground. The median net worth of the average American household peaked in 2007 at $120,300. A few months later–by October 2008–median net worth had fallen to $99,000 as the housing bubble burst, according to estimates by the Federal Reserve Board. What it means: As Americans attempt to regain lost ground, expect fewer babies, larger households, more renters, delayed retirement, spending cuts, and poorer health.

2. Q & A
Are Boomers Less Healthy
than Their Parents?A growing body of data is pointing to the surprising finding that the baby-boom generation may be less healthy than its parents were at the same age.A 2008 National Center for Health Statistics survey finds a substantial 18 percent of 45-to-64-year-olds reporting difficulties in physical functioning. This figure has been growing over the past decade. More than 8 percent of 45-to-64-year-olds say it would be difficult or impossible for them to walk even a quarter of a mile. Ten percent say they cannot stand for two hours, and 11 percent cannot stoop, bend, or kneel. The number of self-reported days of poor physical and mental health have climbed in nearly every age group under age 65, but the biggest gains have been among the 45-to-64-year-olds. People aged 45 to 54 are most likely to report prolonged periods of poor mental health. Twelve percent–or one in eight–have spent at least two weeks of the past month struggling with mental health issues.An analysis of data from the Health and Retirement Study, a nationally representative longitudinal survey of Americans aged 50 and older, finds that boomers born between 1948 and 1953 are in poorer health than were their older counterparts, born between 1936 and 1941, at the same age. Boomers report more difficulty with physical activities, more chronic conditions, more pain, and more psychiatric problems.What could be causing boomers’ greater health problems? The academics who analyzed the Health and Retirement Study data suggest that boomers may be overly aware of medical maladies because of widespread health screening and prescription drug advertising. They also suggest that boomers may be less accepting than older generations of the physiological changes that accompany aging. In other words, it’s all in their heads.

But could there be more to it? Boomers, after all, are far more likely to be overweight than their parents were at the same age. Among women, weight peaks at 172 pounds in the 50-to-59 age group. Among men, the peak is 202 pounds among 40-to-49-year-olds. Excess weight could explain boomers’ increased difficulty in getting around. Stress might explain the rest. Throughout their lives, boomers have faced unprecedented competition in the job and housing markets–lowering wages and driving up the cost of living. Never have those stresses been greater than they are today. At the same time, their parents are living longer and their adult children are more dependent on them than ever before. Labor force participation rates among 16-to-24-year-olds are at a record low. Without work, young adults are moving back in with mom and dad who are increasingly ill-equipped–physically and emotionally–to deal with the added burden of care.

By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, e-mail New Strategist at demographics@newstrategist.com.

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.

Labor Force Projections
Those who want evidence of the decline in the American standard of living need look no further than the new labor force projections by the Bureau of Labor Statistics, available at this link. The labor force participation rate of men aged 62 to 64 is projected to rise from 45 percent in 1988 to 59 percent by 2018. Among men aged 65 to 69, the figure will climb from just 26 percent in 1988 to 40 percent in 2018. Even among men aged 70 to 74, more than one in four (26 percent) will be working by 2018. Travel and leisure industries that have been dependent on retirees will have to look elsewhere for customers.

Employee Benefits
The latest data on employee benefits, available here, show why health insurance reform is so necessary. Among the lowest paid workers in 2009, only 26 percent were offered health insurance by their employer compared with 92 percent of the highest paid workers. Only 24 percent of part-time workers could get health insurance through their employer versus 88 percent of full-time workers. Only 51 percent of service workers were offered employer-provided health insurance versus 94 percent of managers. This site has detailed information on health benefits, retirement plans, vacation time, sick days, and more.

Moving Back Home
The Pew Research Center reveals how the recession is affecting young adults in its report Home for the Holidays…and Every Other Day, available at the above link. Last fall, Pew surveyed a representative sample of Americans and asked them how the recession has affected their living arrangements, finding that many young adults have postponed getting married, having children, and living independently. Ten percent of 18-to-34-year-olds say they have moved back in with their parents in the past year. Thirteen percent of adults with grown children say a child has moved back home in the past year. The figure rises to 19 percent among 45-to-54-year-olds.

BET YOU DIDN’T KNOW

Percent change in the median income of households headed by college graduates, 2000 to 2008 (in 2008 dollars): -5.2.

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